Truth be told, there’s not a damn thing automakers can do to revive the U.S. auto market to 2007 levels. All they can do is ride out the economic shitstorm that was, in no small part, created by the lax lending standards in which they were active not to say maniacally enthusiastic participants (I’m looking at you GMAC). Who would have thought the fact that all automakers are suffering would provide the basis for an excuse for GM to extort $17.4b from Uncle Sugar? Ahem. Anyway, yes, Toyota’s going to take it in the shorts. One TTAC’s front line contacts runs a store in the DC area for the Japanese brand [NB: not the one shown], and checks in on your behalf. “We sold 428 vehicles for December. 148 Used, 380 New Toyota. We sold 625 new and used vehicles last year in Dec. Prius is selling at or below invoice, Camry Hybrid below invoice, Highlander Hybrid below invoice. Just thought you’d like to know.” Uh-oh. I make that a 32 percent drop.
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Right. Let’s have it. I’m going to ask a simple question, and I’m honest-to-God ready, willing and able to hear some new information. What concessions has the United Auto Workers (UAW) ever made to the American automakers? Forget the much-ballyhooed “two tier” wage system. All that means is that new hires don’t get paid as much as the old hires. As there are no new hires, and the theoretical new hires aren’t “conceding” anything they already had, and I’ll bet the UAW’s not cutting their union dues to compensate for the reduced wage structure, I reckon that simply doesn’t qualify. Layoff? Layoffs aren’t concessions– especially when UAW members are paid 85 percent of their salary for not working. Buyouts? Not a concession. The only genuine concession I can think of: the new-for-’07 health co-pay, which stands at $252 in annual premiums for family coverage and another $500 in total annual deductibles. AND there’s a company (not union) fund to cover workers who can’t afford it. The idea that the UAW will concede anything without compensation raises all the usual questions about leopards and spots. But if you’d like to see how the game is played, make the jump for the Detroit News’ properganda [sic].
Automotive News [sub] reports that car rental companies have dialled back their orders by 500k new vehicles. In ’07, they hoovered-up 1.9 million cars, trucks, minivans and vans for their customer’s delight. Last year, that number contracted violently, to 1.5m units. According to Robert Barton, president of the American Car Rental Association, it’s one damn thing after another. “Many rental companies can’t borrow money to finance the inventories they would like, Barton says. At the same time, he says, many franchised dealers cannot get financing to buy thousands of retired rental vehicles at auctions. As wholesale used-vehicle prices and demand fall, Barton says, rental companies are denied another source of money to buy new vehicles. That’s bad news for automakers, especially the Detroit 3, that traditionally have relied on rental companies to soak up their excess inventory.” Ya think? And what’s the bet bailout boys’ bulk biz will be even worse in ’09? Make the jump to count the cost.
I get it! Instead of putting the hate on owners of import-branded cars (as opposed to say imported Fords), supporters of the Big 2.8 could offer special membership benefits to those consumers who chose to support Chrysler, Ford and GM by buying their products (as opposed to say paying their taxes). We’ll have to see how this plays out in Farmington Hills, Michigan, where the owner of The Tribute restaurant is holding the antithesis of hot import nights. You can read the full offer to American-branded car owners (the cars, not the owners) after the jump. Meanwhile, rest assured this is no redneck truck stop. “Each night, executive Chef Rich Travis oversees the creation of eye-opening flavor combinations, pushing the boundaries of innovative cuisine to enthrall diners. His exquisitely detailed food, distinguished by diversity, inventiveness and spectacular presentation, are perfectly complimented by Tribute’s award-winning wine list.” Personally, I recommend the Grilled Honey Chamomile Glazed Duck Breast Duck Confit and Morel Wonton, Parsnip, Carrot, Wild Rice, Chamomile-Citron Gastrique. But then I’ve never eaten there. And I drive a Honda minivan, which, although it’s ranked number seven on cars.com’s American-made index, doesn’t qualify me for a 50 percent discount. Although… “In addition, during the week of Jan. 25-31, Tribute will recognize all American car-markers and offer a 50 percent discount on food purchases to anyone who drives an American made vehicle, including American automotive suppliers and dealers.”
I’m not sure why The Wall Street Journal thinks Germany is the next Japan in the U.S. new car market. For one thing, the market itself is lying in the gutter, naked, hungover and bleeding. In this environment, cutting capacity, protecting market share and not losing too much money (a.k.a. eliminating all but essential expenditure) is the only sensible plan. In fact, this article– “Europeans Raise Pressure on Detroit”– would be better entitled “Detroit’s Dead, VW’s Arrogant, BMW’s Hopeful and The Japanese are Hunkering Down.” Scribe Kate Linbaugh is content to take VW’s pre-crash, snicker-worthy “1m Vehicles or Bust” proclamation at face value, and extrapolate from there. “VW is investing in its first U.S. factory in two decades and expects to triple U.S. sales to one million vehicles by 2018. BMW is introducing a new small car and expanding its distribution network.” Never mind those previous, abortive efforts to make the U.S. Germany’s Land of Plenty (excluding Bimmer’s two-mode hybrid SUVs or VW’s Phaeton). “This time, European car makers insist more diverse product lines, healthy marketing budgets and access to nonunion labor can overcome past stumbles. VW is developing specifically for the U.S. several new models, including a family sedan. [VW Routan shown, irony be damned.] A new American manufacturing operation will free it from the currency swings that have hampered its U.S. sales in the past.” Do I detect a thinly-veiled attempt to say Japan and now maybe even Germany have a better U.S. business model than Detroit; a theory made on the cusp of December’s disastrous sales numbers to create maximum embarrassment for Motown? Well duh.
Warren Brown is nothing if not ambitious in his defense of the indefensible (i.e. GM CEO Rick Wagoner). Rather than just raise a[nother] cheer for the man who’s spent the last decade-plus jamming the yoke forward on General Motors’ inexorable descent into bankruptcy, the Washington Post carmudgeon decided to rewrite the entire history of the Japanese “invasion” of the American automotive market. But before he does that, Warren upbraids those who’ve called for Toyota Prez Katsuaki Watanabe to resign, suggesting that Watanabe and Wagoner are birds of a feather, getting flocked together. “GM, as we all know, has lost substantially more than $1.7 billion. In fact, it has lost $72.3 billion since 2004 under Wagoner’s reign. By that measurement, applying Fire the Coach rules, Wagoner is 40 times more deserving of dismissal than Watanabe. But here’s arguing that all of that is sloppy logic and in many ways inherently unfair. Here’s also suggesting that Fire the Coach management will solve nothing — or remedy very little — in an arena where game policy is athwart common sense, as it is and has been in a United States absent effective industrial and energy policies.” Same old you-know-what, different wrapper. Brown is once again, blaming everyone BUT Wagoner for GM’s chronic, shameful self-destruction.
Coming of age in the 70’s (lucky me), Cadillac represented everything I didn’t like about American cars. Like its lesser-priced sibs, it was an anti-sports car. With the possible exception of Lincoln’s Continental Mark My Words This Car is as Good as a Cadillac, a Caddy was THE anti-sports car. The idea of hustling one of those land yachts around a corner was laughable. And for me, it was all about the handling. (Driving a Dino had changed my life.) I remained contemptuous of America’s love affair for Caddy’s “sofas on wheels” right until the moment I met a girl in Aspen who drove a meticulously maintained 1962 Cadillac convertible like the one shown. Suddenly, all the curves I needed were inside the car. You know that song Slow Hand by the Pointer Sisters? It was on the Caddy’s radio during one especially memorable drive. I got it. And Caddy, I reckon, has lost it.
There are all sorts of end of the year automotive lists. The ten best this and the ten worst that. My favorite list is not a car gong per se. The Darwin Awards are given to those who improve the gene pool by removing themselves from it. As you might imagine, automobiles figure prominently in this roll call of death by stupidity. To wit: Ivece Plattner of Italy. Plattner was driving a Porsche Cayenne (which is already a bit of a red flag), stuck in traffic on a railroad crossing, waiting for the light to turn green. When the crossing barriers came down, they trapped the Cayenne.
From Auto Letters by Jim Mateja in the Chicago Tribune: Q I purchased a new 2009 Chrysler 300 SRT8 a few weeks ago from dealer stock. The rear license plate was on, but the front wasn’t. The plate bracket was in the trunk, but I was told that nobody was available to install the front plate. I was told not to worry because I wouldn’t get pulled over and it looks better without the plate. If I wanted, I could bring the car back to get the plate installed. When I got home, I looked at the bracket to see whether I could install it and found that Chrysler changed the grille on the 2009 300 SRT8. The directions show the bracket is made to attach to the old grille. The parts department said the bracket is the correct one for my vehicle. I took the car back to dealer, and they agreed it couldn’t be installed, but there was nothing they could do. They said I should display the license plate on my dashboard. How can Chrysler produce a car that doesn’t and can’t conform to the state law, which requires a front plate? A How could a dealer tell you not to worry and that you wouldn’t get stopped for driving without a front plate that’s required by law in Illinois? And how could a dealer tell you to display the plate on your dash when all it takes to attach the bracket is cutting it to fit the mesh grille that replaced the egg-crate grille for 2009? ‘It just takes a little initiative by the dealer,’ Al Wagener, a salesman at Knauz Chrysler in Lake Bluff, told us when we called to ask how Chrysler could have goofed.”
GM’s scaling back its presence at this year’s don’t call it the Detroit Auto Show. Reports suggest a 32 percent reduction in shrimp size during press days and swag bags filled with actual brochures. You know austerity is the profligacy when Cadillac– GM’s top brand– decides to e-unveil their all-new SRX ahead of its Motown debut. Be that as it is, the formerly narrow-hipped Caddy will come in two flavors: a 3.0-liter direct injection V6 (260hp and 221 ft.-lbs. of torque) and a 2.8-liter turbocharged six (300 horsepower and 295 ft.-lbs. torque) Caddy promises that both aluminum-engined models will achieve fuel economy “in the 20s”– which is a bit like saying nothing much at all, really (low, mid or high; highway, combined?). The SRX faces stiff competition from existing players: the Lexus RX, BMW X3, Acura MDX and consumers’ existing vehicles (thanks to a moribund market for new cars). With optional 20″ wheels, LED brand boasting kick panels and the now signature cow-catcher prow, Cadillac seems to be hoping SRX’ image will move from invisible and soccer-Mom-station-wagon-on-stilts to Escalade-lite. (Low taste, less filling.) Can the SRX command a premium, or will it be another Art and Science of the deal job? They’ll announce the all-important price just as soon as the first tranche of bailout money– sorry, press coverage is spent.
A – due to worldwide holiday inertia – very short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. Until Jan 4, 2009, WAS is being filed from Tokyo.
Japan relieved that Chrysler got the money: The Nikkei (sub) brings its Japanese readership the happy news that “Chrysler LLC received its $4 billion low-interest federal government loan Friday, helping the auto maker continue funding its operations and paying its suppliers for parts.” This is registered with relief amongst JP automakers, as they worry about the health of their suppliers. The Nikkei also points out that “Cerberus is interested in finding a partner for Chrysler.” The search for suitors may be hampered by the fact that Chrysler “relies on North America for about 90% of its overall sales.”
Geely has big plans: China’s Geely aims to boost vehicle sales by 25 percent this year by way of new models and government incentives. Geely plans to sell 281,000 units this year, against nearly 225,000 units in 2008, a company official, Zhang Xiaodong, said according to Gasgoo. Geely is the only larger Chinese car maker that has not formed any alliances with foreign counterparts. They just received a $147m line of credit from China Everbright Bank.
The basic idea behind Hyundai’s new Assurance scheme: if you can’t afford the payments on your new Hyundai-financed Hyundai within the first year of financial servitude, just drop it off and walk away. No debt. No ding to your credit rating. No charge. The devilish details might not keep the Charmed Ones busy, but they’re worth a closer look. For example, you can only boomerang your Hyundai if you’ve experienced “involuntary unemployment, physical disability, loss of driver’s license due to physical impairment, international employment transfer, self-employed personal bankruptcy, accidental death.” One wonders about the importance of credit ratings to someone who’s just shuffled off this mortal coil, but that’s just quibbling. And, of course, there’s a few Hyundai-shaped hoops you have to jump through even if you are dead.
Wheels Weekly (WW) has the heads-up on Ingolstadt’s claim that the LED headlights adorning the front of their uber-R8 are good for Mother Earth. The blogger-in-chief’s prose sounds a bit like the flanking English translation in a German airplane magazine, but he nails it in the incredulity department. “Now as times are tough for manufacturers, every little selling point are scavenged and placed under a magnifying glass looking to woo any sort of buyers they can gather, pretty much the case with this Audi R8 V10, we’re abit loss [sic] reading an entire page of press release which had nothing to do with Nurburgring records or skidpad figures, rather, boasting about its all LED headlamp, how much CO2 it saves.” It’s not an entire page of greenery, and I’m a big fan of incrementalism. And a car nerd. But it is strange world where Audi’s Head of the “Light and Visibility Department” trumpets CO2 savings. [excerpt after the jump]
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